The problem is using actions to infer terminal values. In order to determine your terminal values, you have to think about them; reflect on them. Probably a lot. So in order for the actions of a person to be a reliable indicator of her terminal values, she must have done some reflecting on what she actually values. For most people, this hasn't happened.
I disagree. People who believe they have thought about their terminal values are often the most confused about what they actually value. Human values as judged by observing how people act rather than by what they claim to think are more self-consistent and more universal than the values professed by people who think they have discovered their own terminal values through reflection. Your conscious beliefs are but a distorted echo of the real values embodied in your brain.
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I can see why you might feel that way, if this was just a technical flaw in CEV that can be fixed with a simple patch. But I've been having a growing suspicion that the main philosophical underpinning of CEV, namely preference utilitarianism, is seriously wrong, and this story was meant to offer more evidence in that vein.
CEV is not preference utilitarianism, or any other first-order ethical theory. Rather, preference utilitarianism is the sort of thing that might be CEV's output.